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2010 (9) TMI 894 - ITAT AHMEDABADEducation Trust - registration u/s 12A(a) - invoking the proviso to section 12AA(3) - cancellation of the Registration - show cause notice issued - no books of account found at the time of survey conducted u/s133A - receipts found unaccounted - accepted admission-fees in cash - contravention of the provisions of section 139(4A) - it was held by the ld. Commissioner that the funds of the Trust were misused by not accounting for the receipts as well as the expenses. As per ld. Commissioner, the activities were also not in accordance with the objects of the Trust, hence, by invoking the provisions of cancellation of Registration he has decided to cancel the Registration granted even prior to 1-10-2004. It was concluded that the benefit of registration was revoked which was earlier granted by an order of registration dated 22-2-1991. Now this impugned order passed u/s 12AA(3), invalidating the existed registration, is challenged before us. HELD THAT:- That the ld. Commissioner has to comprehend the objects of the Trust whether they are meant for public utility [requirement of section 12AA(1)(b)] and secondly that the activities have actually as also genuinely been carried out to fulfil the aims of the Trust [requirement of section 12AA(1)(a)]. In the present case, the Trust being an educational institution and undisputedly imparting education, therefore, it was not justifiable on the part of the ld. Commissioner to deny the registration. Nevertheless, the application of income and the utilization of funds is always subject to scrutiny by the AO while assessing the income of the Trust, for this legal proposition. we can rely on Sanjeevamma Hanumathe Gowda Charitable Trust v. DIT (Exemptions) [2006 (3) TMI 91 - KARNATAKA HIGH COURT], CIT v. Red Rose School [2007 (2) TMI 575 - ALLAHABAD HIGH COURT] , and Acharya Sewa Niyas Uttaranchal v. CIT[2006 (11) TMI 249 - ITAT DELHI-G]. We may, therefore, clarify that merely by granting a registration u/s 12A/12AA, a trust ipso facto is not entitled for the exemptions prescribed u/s 11 and 12. Neither de jure nor de facto, i.e., neither in principle nor in practice, a trust can get exemption u/s 11 and 12 merely on getting a registration u/s 12AA/(in the past 12A). Therefore, we hereby hold that the cancellation of registration, on both the counts, i.e., on merits as also on the legality of jurisdiction, was not in accordance of law. As a result, ground raised by the assessee is allowed.
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